Diamond Eagle Acquisition Corp., a Century City-based blank check company formed by two veteran Hollywood executives, raised more than $400 million in its trading debut May 10.
The company began trading on Nasdaq Inc. under the symbol of DEACU according to a filing with the Securities and Exchange Commission.
In its first day, the stock — which was priced initially at $10 — closed higher by 3 cents. The initial public offering had originally been expected to raise $350 million, but the offering was “upsized” to $400 million based on demand.
A blank check company, also known as special-purpose acquisition company, or SPAC, is a corporate shell through which investor money is raised via a public offering. Shares in blank-check companies tend to trade around their IPO prices — at least until the SPAC moves to make an acquisition and take the target company public.
Diamond Eagle Acquisition’s sponsors are Century City-based Eagle Equity Partners, which is controlled by veteran Hollywood executive Jeff Sagansky and investor and fund manager Eli Baker, as well as Harry Sloan, chairman and chief executive at Global Eagle Acquisition Corp.
Sloan, who previously served as chairman and chief executive of Metro-Goldwyn-Mayer Inc. from 2005 to 2009, has been involved in several blank check offerings alongside Sagansky in recent years. The two executives have taken four other blank check companies public since 2011: Platinum Eagle Acquisition Corp., which raised $325 million in January 2018; Double Eagle Acquisition Corp., which raised $500 million in 2015; Silver Eagle Acquisition Corp., which raised $325 million in 2013; and Global Eagle Acquisition Corp., which raised $190 million in 2011.
SPACs generally have anywhere from 18 months to two years to make an acquisition. If they don’t meet the deadline, or if they fail to gain shareholder support on a purchase, the SPAC must return the money raised to investors. While SPACs are publicly traded, their shares are often held closely by the entity or entities behind them until an acquisition is made.
Diamond Eagle Acquisition was formed for the purpose of effecting a merger with one or more businesses, which still must be identified.
